Wells Fargo Business Law Report

Running head: Business Report
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Business Law Report, Wells Fargo
Name
Institution

Business Report
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Summary
According to the Federal Reserve of the US, Wells Fargo violated the Financial Privacy Act
by using customers’ data to advance the banks goals and objectives. Investigations reveal that the
laws were deliberately and intentionally broken by bank. This business report will deal with the
actions that lead the bank to deliberately act against the various financial obligations it has to its
customers. Details of the role of the bank’s board of directors and regulators in ensuring
compliance rules are enforced will be analyzed and suggestions provided to strengthen the
financial industry.
Wells Fargo was accused and found guilty for violating Consumer Protection Act between
2008 and 2009. The scandal can be attributed to an aggressive marketing strategy by the
financial institution to meet its sales targets. Through cross-selling, the bank employees urged
customers to purchase additional financial products offered by the bank. Incentives were offered
to employees who surpassed their sales targets. The unethical violations can be attributed to
greed by the employees when they opened accounts for their customers without the customer's
consent. Customers were charged fees for accounts and financial products they had not taken.
This business report assignment will highlight the ethical violations committed by Wells Fargo.
These violations will focus on how business targets and strategies should not be used to
undermine financial compliance and consumer protection by financial institutions. This report
will also focus on the role regulators played in protecting consumers in the Wells Fargo scandal.

Business Report
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Laws Broken by Wells Fargo
According to the US Federal Reserve, banking rules are controlled by both the federal and
state governments. The laws violated by the bank were consistent in different states and applied
the same pattern. Wells Fargo was found to have intentionally broken the following laws
1. Financial Privacy Act: This act was formulated in 1999 to protect customers’ information
(Taylor & Cedrone, 2010). Wells Fargo used the privacy of its customer’s data for selfish
gains. The law dictates that the information stored by the financial institution should not
be used by the bank to advance its agenda without the customers' consent.
2. Consumer protection: The laws on consumer protection deals with mortgages and credit.
The bank was found liable to have used a vacuum in the law to its advantage (Mims,
2017). There is no legal obligation that prevents banking institutions from opening
additional accounts for their customers. Fair business practices were overlooked and the
bank exploited the lack of stated laws. The customers were not protected by the bank but
used for financial gain by Wells Fargo.
3. Transparency: Wells Fargo failed to be open in its dealings with its customers.
Businesses are required to be open and honest in their dealings. This act is assumed to be
automatic to all business transactions but unfortunately, Wells Fargo failed.
4. Financial Reporting: Financial institutions are mandated by the law to adhere to set
financial reporting standard. This includes all the happenings including business strategy
and financials. Wells Fargo failed to report its aggressive marketing strategy to all its
stakeholders. If this could have been done, measures could have been put in place to
prevent the massive opening of fraudulent accounts.